The Rent May Help Your Credit

Unpaid rent bills sent to some debt collectors will show up on credit reports. But now on-time payments can count, too.

Two of the three major credit-reporting firms, Experian and TransUnion, now allow renters to include on-time rent payments on their credit reports.

To have positive rental-payment history factored in, you'll need to go through a third-party company—and sometimes pay a fee. While rental payments will show up on the firms' credit reports and some credit scores like the VantageScore, they won't be reflected in the FICO credit score, which is commonly used by lenders, says FICO. Whether the rent payments benefit you depends on which credit report is being pulled.

But these services could be worth it, especially for those with no credit or who are looking to rebuild credit, says John Ulzheimer, president of consumer education at SmartCredit.com.

On-time rent payments have been automatically included on Experian credit reports for a while, for those living in an apartment building whose owner reports those payments to the firm. But as of last week, other renters can opt to have payments included on their Experian report if they pay their rent through a firm called WilliamPaid.

After signing up at williampaid.com, renters can pay the rent free via bank transfer or with a credit card, for a fee of 2.95% of the total amount. Or they can pay in cash at one of 45,000 locations, including MoneyGram locations.

With TransUnion, you pay rent as usual, which is verified by RentalKharma.com or RentReporters.com. Rental Kharma charges $10 to report two years of past payments. RentReporters charges $10 a month for ongoing reporting.

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